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  1. #1
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    Looking at my first house

    At 33, I think I am ready to purchase my own house. Talk about an overwhelming experience. I'm in good financial standing, but the amount I have for down payment is less than ideal.

    I have looked into first time home buyer programs in Austin, and it seems there are a few programs that can assist. Does anyone have any suggestions or advice for first time buyers?

  2. #2
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    no particular advice, but if you're buying a house in AUS, you must be doing ok financially.

    real estate prices here are bordering on the ridiculous.

    fixer-uppers in my area (mostly 1950s vintage homes on 1/4-acre lots that are rarely larger than 1200 sf) are in the $500K range.

    a house one street over from me is advertised as 'bulldozer-ready' for $455K.

    makes my $60K investment in 1990 seem like a brilliant move.

    with the heinous traffic issues, I wouldn't buy anything that was a long commute from the work place.
    the 45th POTUS is inept, corrupt, and a pathological liar. and those may be his better qualities...

  3. #3
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    If you don't have sufficient funds for a downpayment, then don't do it.

    I'm a fiscal conservative, and my suggestion is to keep saving until loan terms and payment schedule are better than industry recommendations. Keep a margin of safety in case you run into life problems such as work, health, etc. .

    That's my advice.

  4. #4
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    My only advice I can share is to be comfortable with your purchase and buy a house you can afford.

    My wife and I could have bought more home, but have alway stuck to this rule: purchase a house that you can stay in even if you lose one of two incomes. We are not flashy people and never fell into the trap of conspicuous consumption or felt the compelling desire to use our home as a means to show off to our friends.

    The modest house note is our only financial obligation.

  5. #5
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    Here in upstate Noo Yawk, there are LOTS of incentive programs for buying urban 'fixer-upper' houses, not to mention low cost loans to improve your house. At my last house, we got a $5000 grant to repair out garage!
    "L'enfer, c'est les autres"

  6. #6
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    I would at least try to save enough down so you don't have to purchase PMI.
    Ghurarmu shirkush’ agh azgushu. Zant ya apakurizak. Gűl-n’ anakhizak.

  7. #7
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    I have bought and sold a lot of houses, my one piece of advice:

    Don't start any negotiations that you are not willing to walk away from. Emotional attachment is the ruin of negotiation and the person who cares the least will win.

  8. #8
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    Take a good long look at things like the electrical system and foundations. Stay away from houses that have any real problems with them. And ask about the roof. Take a ladder and look at it. Aways take a flashlight and get a good long look inside any spaces that are hidden. I got my first house last year and got a good deal. I'm happy with it but it has some concrete issues I wish it did't.

  9. #9
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    I wouldn't worry too much about PMI, because once a certain percentage of the loan is paid off you can cancel it... unless it's a FHA loan.

    Don't blow all your savings on the down payment - you will have extra expenses that you weren't planning for, like inspections (home, termite foundation?), curtains, curtain rods, blinds, tree work, etc.

    Do your due diligence. Enlist some voices of reason and listen to those voices. Be willing to walk away from the house you really want.

    Look for cracks in brick and mortar. This isn't a deal breaker but they'll need to be repaired, preferably before purchase. In my area, most foundation repair companies will perform a free inspection and provide an estimate for any fixes.

    If you're anywhere near water, you'll need flood insurance and you'll need to budget for it. You can go with a NFIP plan (what I originally had) or Private Market Flood Insurance (what I have now). The govt lets insurers provide NFIP plans for a cut of the premiums, so they will try and max out your coverage amounts to increase their cut. If you do your homework and believe that your home will have minimal damage from a flood, you can insure only the amount you owe. Going from an NFIP to PMF plan and reducing the payout to only what I owed dropped my annual premium 2k. Then a year later my area had a 1000 year flood and just about everyone on the other side of my small lake flooded - my side was on higher ground and I only got water in my crawl space.

  10. #10
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    I guess my main issue is I'm just fed up with my current housing situation (shared a house with 2 roommates, and they brought 2 more on board that I was told "for a short term" which has now been 6 months and one is planning to stay indefinitely) and I am right at that verge of being able to get into a house.

    Between the amount I have saved, and getting an eligible grant, I'll have anywhere from 11-20% down payment with an emergency fund that can cover ~4 months of expenses. I can either get an apartment now and then save for another year or so, or just try and get into a house now. Another thing is by next August, I hope to have the remainder of my student loan paid off.

    Fortunately being single without any ambitions to start a family, I really don't need or want for a big house.

    Quote Originally Posted by Oxtox View Post
    no particular advice, but if you're buying a house in AUS, you must be doing ok financially.

    real estate prices here are bordering on the ridiculous.

    fixer-uppers in my area (mostly 1950s vintage homes on 1/4-acre lots that are rarely larger than 1200 sf) are in the $500K range.

    a house one street over from me is advertised as 'bulldozer-ready' for $455K.

    makes my $60K investment in 1990 seem like a brilliant move.

    with the heinous traffic issues, I wouldn't buy anything that was a long commute from the work place.
    Oxtox, I'm mainly looking in the NE Austin/Pflugerville area or Manor. Pflugerville is preferable as it makes cycling to work every day feasible and the housing cost hasn't skyrocketed as much as other parts of Austin.

  11. #11
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    Quote Originally Posted by El Scorcho View Post
    I have bought and sold a lot of houses, my one piece of advice:

    Don't start any negotiations that you are not willing to walk away from. Emotional attachment is the ruin of negotiation and the person who cares the least will win.
    Aim for an attitude of just business, nothing personal. Another one will come along.

    Mrs. 10ae and I were a bit less detached than we should have been last year, but it is a nice place. So learn from us. Be tough and practical.



    Quote Originally Posted by pulser955 View Post
    Take a good long look at things like the electrical system and foundations. Stay away from houses that have any real problems with them. And ask about the roof. Take a ladder and look at it. Aways take a flashlight and get a good long look inside any spaces that are hidden. I got my first house last year and got a good deal. I'm happy with it but it has some concrete issues I wish it did't.
    Don't do your own inspection. Which is not to say you should not look at everything Pulser says. Go and look, poke stuff, take a big flashlight. Take pictures and good notes.

    Still, have your impartial inspector give it a going over.

    Quote Originally Posted by beeristasty View Post
    ...
    Don't blow all your savings on the down payment - you will have extra expenses that you weren't planning for, like inspections (home, termite foundation?), curtains, curtain rods, blinds, tree work, etc.

    Do your due diligence. Enlist some voices of reason and listen to those voices. Be willing to walk away from the house you really want.

    ...
    Damn, but there are a lot of things to buy and pay for. I was surprised by the nickel and diming, not to mention the two weeks of takeout around packing up and moving in because you don't know where anything is.

  12. #12
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    If family isn't an issue, get the "least" house in the "best" neighborhood you can afford. Check the best school districts and places with "walkability" and see if there are small fixer-uppers (if you're handy.)

    Check online each weekend, see where the open houses are in the areas you like, and check them out. Print out the Trulia/Zillow pages for them, get a sense of what the prices are, and be aware that they inflate the selling prices to allow room for negotiation (around here, we figured it was about $20k.)

    We had a great inspector, but even he couldn't detect stuff like the cracked iron drainpipe (what are the odds??) and the leaky shower pan. But renovations are almost always a given. We had the pipes checked for roots, assured no lead paint (for houses of a certain age), and no oil tank buried in the yard (you don't want to be stuck with that).

    Be careful of new paint, yes it's what people do as a way to sell the house faster (sprucing it up) but it could be hiding leak stains. Poke around in the basement. Run the tap(s) in the main bathroom.

    In our area, realtors have been poking around, hoping people want to sell- values have gone up around 30%. Which is nice, but where are we gonna go?? Might be another bubble.

  13. #13
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    Quote Originally Posted by jason124 View Post
    Oxtox, I'm mainly looking in the NE Austin/Pflugerville area or Manor. Pflugerville is preferable as it makes cycling to work every day feasible and the housing cost hasn't skyrocketed as much as other parts of Austin.
    yeah, your money will go much further in those areas...I'm 10 miles from downtown and halfway between I-35 and Mopac, so location is pretty ideal. my neighborhood used to be mostly original owners and new-family starters, but at the current prices, the older folks on fixed income can't handle the taxes and young people can't swing the financing. lot of people coming from the West Coast who buy/demolish the little ranch homes and build 3500 sf faux-mansions.

    a 20% down payment seems pretty decent. just don't saddle yourself with monthly mortgage payments that are too steep...living paycheck to paycheck gets old really quickly.

    don't take on any major debt prior to qualifying for a loan either. paying off your student loan would be good, so waiting until that's done might help things.

    but, don't see the housing market getting any cheaper in the near-term tho, so there's that to consider...prices in my 'hood are escalating at a crazy pace.
    the 45th POTUS is inept, corrupt, and a pathological liar. and those may be his better qualities...

  14. #14
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    Quote Originally Posted by jason124 View Post
    At 33, I think I am ready to purchase my own house. Talk about an overwhelming experience. I'm in good financial standing, but the amount I have for down payment is less than ideal.

    I have looked into first time home buyer programs in Austin, and it seems there are a few programs that can assist. Does anyone have any suggestions or advice for first time buyers?
    I am going to slightly disagree with those that keep saying "wait until you have a big down-payment". Right now you spending money on rent that is helping someone else's equity. The sooner you buy, the sooner you start building some equity yourself. I know that a house is someplace you live first and and investment second, but with prices on the rebound, waiting may mean you miss out

  15. #15
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    2 things you absolutely must do:

    1: Have the house you choose inspected by a professional inspector that YOU hire.

    2: Find a good real estate attorney before making an offer on your house. You do NOT want to close on a house without legal representation.

    Also, have mortgage financing approved before you make an offer.
    "L'enfer, c'est les autres"

  16. #16
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    Quote Originally Posted by Christine View Post
    If family isn't an issue, get the "least" house in the "best" neighborhood you can afford. Check the best school districts and places with "walkability" and see if there are small fixer-uppers (if you're handy.)

    Check online each weekend, see where the open houses are in the areas you like, and check them out. Print out the Trulia/Zillow pages for them, get a sense of what the prices are, and be aware that they inflate the selling prices to allow room for negotiation (around here, we figured it was about $20k.)

    We had a great inspector, but even he couldn't detect stuff like the cracked iron drainpipe (what are the odds??) and the leaky shower pan. But renovations are almost always a given. We had the pipes checked for roots, assured no lead paint (for houses of a certain age), and no oil tank buried in the yard (you don't want to be stuck with that).

    Be careful of new paint, yes it's what people do as a way to sell the house faster (sprucing it up) but it could be hiding leak stains. Poke around in the basement. Run the tap(s) in the main bathroom.

    In our area, realtors have been poking around, hoping people want to sell- values have gone up around 30%. Which is nice, but where are we gonna go?? Might be another bubble.
    Seems that property tax in areas with "best schools" are pretty high because of said schools. Some of the houses I have been looking at has property tax in the $4k range.

    Quote Originally Posted by No Time Toulouse View Post
    2 things you absolutely must do:

    1: Have the house you choose inspected by a professional inspector that YOU hire.

    2: Find a good real estate attorney before making an offer on your house. You do NOT want to close on a house without legal representation.

    Also, have mortgage financing approved before you make an offer.

    1. I knew about the pre-purchase inspection. The current house I am in, we had a PPI done by a inspector that was recommended to us by a realtor friend. Like Christine said, there were issues that were missed like an active termite colony that was attacking the stair case and the stair case only. No damage or evidence of termites anywhere else.

    2. I thought working with your own real estate agent was sufficient in regards to closing on a house?

  17. #17
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    I guess I've been lucky - haven't needed a real estate attorney for the two houses I've bought - actually, I've never heard of that before.

    To the OP - I think you're on the right track. You don't have to put down a massive down payment, but more is better than less. Like others have said, make sure you have a decent emergency fund in place - and I don't mean for extras for the house - I mean for stuff not house-related.

    Yes, you will need $$$ for "house things", but I normally don't worry much about that.

    As someone else said (and this is how I feel) - if you can afford a house, do it, because then you're paying every month for something that is "yours", not for something that is someone else's and you are just using it while you live there.

    Good luck!

  18. #18
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    Quote Originally Posted by Surveyor 777 View Post
    I guess I've been lucky - haven't needed a real estate attorney for the two houses I've bought - actually, I've never heard of that before.

    To the OP - I think you're on the right track. You don't have to put down a massive down payment, but more is better than less. Like others have said, make sure you have a decent emergency fund in place - and I don't mean for extras for the house - I mean for stuff not house-related.

    Yes, you will need $$$ for "house things", but I normally don't worry much about that.

    As someone else said (and this is how I feel) - if you can afford a house, do it, because then you're paying every month for something that is "yours", not for something that is someone else's and you are just using it while you live there.

    Good luck!
    I agree with this. I've sold one house, bought two houses, and refinanced the one I own three times and never had a real estate attorney involved.

    If you're in a hot market, home values may be increasing faster than you can save money. I'd lean towards doing it now. And the advice about getting one in a good school district is spot on. You may not have kids, but a lot of future buyers will, and school districts are a big deal. I like Christine's advice of getting the smallest house in the best neighborhood. And since its a house, you can always get a room mate for a year or two if finances get tight. Or marry a woman with a good job. That's what I did.

  19. #19
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    "3500 sf faux-mansions"......my son lives in a similar type neighborhood in Dallas in a 1950s vintage that has been added to and remodeled. Practically every house that sells get bulldozed and up goes a two story built from setback to setback using a style that seems to try and see how many different types of brick or faux stone can be used on the portions fronting the street. I have been a Real Estate lawyer for almost 40 years, Board Certified in Real Estate by the Florida Bar since 1992, and worked with a lot of developers but never seen anything like this "style" of architecture.

    I expect that if he sells his house, it will be torn down too.

  20. #20
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    Quote Originally Posted by pmf View Post
    I agree with this. I've sold one house, bought two houses, and refinanced the one I own three times and never had a real estate attorney involved.

    If you're in a hot market, home values may be increasing faster than you can save money. I'd lean towards doing it now. And the advice about getting one in a good school district is spot on. You may not have kids, but a lot of future buyers will, and school districts are a big deal. I like Christine's advice of getting the smallest house in the best neighborhood. And since its a house, you can always get a room mate for a year or two if finances get tight. Or marry a woman with a good job. That's what I did.

    Bingo... 4 years ago, the house I am currently residing in was purchased for $176k (purchased by friends which I begrudgingly stayed as a roommate of, but that's another story). Another house in the same cul-de-sac sold for $250k earlier this year. Staying in the same area of town, houses that are about half the size of the current one I am at are in the $170k-$200k range. The lower end of the spectrum usually sell in a week of being on the market.

  21. #21
    pmf
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    The house I bought in 2001 has doubled in value. I couldn't afford to buy it if I had to start over.

  22. #22
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    Quote Originally Posted by pmf View Post
    The house I bought in 2001 has doubled in value. I couldn't afford to buy it if I had to start over.
    It's for this reason why I'd say, if you can afford it, and you know you'll be staying in the area, get the kind of house that you want now. More importantly, the type and area that will appreciate the most. Crazy to think that the down payment needed now to avoid paying PMI, would have almost completely paid for the same house at the start of the housing boom in my area.

    Unfortunately, after buying a house with/for my mom, I was only able to afford a townhouse. While it appreciated about 30% a few years after I bought it in 2004, when the recession hit, I could have only sold it for what I bought it for, and it has only started appreciating from that price again "this year". I won't get back anywhere near the 13 years worth of payments I've paid so far. Had I spent a few hundred more per month, for a better/newer home/neighborhood, I'd be much better off. My income has doubled since buying the house, but like pmf said, I'd be hard pressed to be able too afford a single family home in my area now.

    That said, I wish I'd had seen this video first, so I could have at least had more information to plan better:

    https://youtu.be/oR-SxrPPqRc

  23. #23
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    Quote Originally Posted by jason124 View Post
    ....

    2. I thought working with your own real estate agent was sufficient in regards to closing on a house?
    NO,NO,NO,NO,NO!!!!!!!!

    You are going to close on a house. The bank has an attorney there. You are signing a shitload of paperwork; do you know what the ramifications of each document is? An attorney is a small price to pay to avoid big problems.

    When I bought my first house, we got to closing, and the seller's attorney had screwed up a couple of documents. We walked out of the closing, and rescheduled a few weeks later. My attorney possibly saved me from signing on a title that was not clear, meaning that there may've been somebody else who had a claim on the property. Could you have spotted that error?
    "L'enfer, c'est les autres"

  24. #24
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    I am not offering any advice here but I have bought 2 houses and sold 2 and there not an attorney involved in any of those from either the buyer, seller, or bank. If there were unusual circumstances than an attorney may be needed but a am personally not going to pay 100`s of dollar to an attorney to watch me sign documents. Then again it could be be luck

  25. #25
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    I thought working with your own real estate agent was sufficient in regards to closing on a house?
    I'm going to agree with NTTL here.

    I'm in Canada but I think our systems are similar. Sorry to any agents out there but despite all their self-serving publicity, IME they do SFA. If there was someone in the process I'd do without it would be the agent.

    You absolutely need a lawyer to check title, liens, etc. Title insurance is cheap and also recommended. I like to get a survey drawing if at all possible. After all you're buying land too, so should know the boundaries and any easements.
    We just don’t realize the most significant moments of our lives when they’re happening
    Back then I thought “well there'll be other days”
    I didn’t realize that was the only day
    https://www.youtube.com/watch?v=Y9yrupye7B0

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    So let's just say I'm drivin' this buggy...
    and if you fix your attitude you can ride along with me.
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